[Reporter’s Notebook] Naver’s Strategic Silence

Naver has disappeared from the Line Yahoo incident. It is refraining from expressing its voice externally as much as possible and only reaffirming its existing position. After the official statement that "all possibilities, including share sales, are open and consultations with SoftBank are ongoing," it has not responded at all to questions from the government or the media. Even though the Korean government provided a specific explanation on behalf of Naver that the administrative guidance report submitted to Japan's Ministry of Internal Affairs and Communications by July 1 would not include any content related to share sales, Naver itself has not taken a stance on whether this is true or false.

There are many criticisms that it is problematic for Naver not to reveal its "intentions" even though an unprecedented situation is unfolding where a Korean company might have its shares forcibly taken due to actions by the Japanese government. The argument is that one must understand "what is the best path for Naver" in order to help.

Considering the complex situation, it is interpreted that Naver is trying to employ a "speed control" strategy. Junichi Yakawa, CEO of SoftBank, once said about the capital relationship discussions, "The timing is not decided, but it will be very difficult to finalize by the reporting deadline of July 1 to the Ministry of Internal Affairs and Communications." If Naver were to react immediately to this claim, it could result in being swept up by the strategies of SoftBank and the Japanese government, who want to accelerate the process. An IT industry insider familiar with this matter commented, "Using the excuse of a mere 520,000 cases of information leakage, the Japanese government has brought the share negotiations between Naver and SoftBank to this stage," and added, "They will likely want to quickly close the deal at this point."

The remarks by Take Idezawa, CEO of Line Yahoo, are also interpreted in the same context. At a briefing by Line Plus, the Korean subsidiary, he expressed the intention to "guarantee employees' employment," which is something that would typically come out at the final stages of a merger and acquisition (M&A). This attitude also aims to make the negotiation a foregone conclusion and pressure Naver and the Korean government.

In this situation, various suggestions are emerging, such as the need to protect Line's business in Taiwan and Southeast Asia, or to sell Line shares and secure a substantial management premium to invest in artificial intelligence (AI). If doing so is advantageous for Naver, Naver would not hesitate to speed up the negotiations.

However, Naver's focus on silence and buying time likely stems from the judgment that this approach is beneficial to itself. It could be a strategy to either reset the negotiations entirely or maximize its bargaining power.

Above all, the most important thing in any situation is "the interests of Naver, its employees, shareholders, and users in the Republic of Korea." If public opinion in Korea intensifies, pressuring Naver due to the lack of progress and stalled negotiations, the party that will be disadvantaged is not SoftBank or the Japanese government, but Naver itself. A more meticulous and delicate approach by the Korean government is necessary. There must be no mistakes in the negotiations caused by being fixated on the achievement of "the government stepping in to save Naver."